EU says smarthome 'gatekeepers' like Apple may harm competition

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The European Union has issued a preliminary report into smarthomes and the Internet of Things, saying that Apple, Google, and others could prove to be anticompetitive.

As the European Commission waits on Apple's response to the charge of breaching EU competition law, it has separately been investigating smart homes. A preliminary report into the Internet of Things concludes that there may be anticompetitive practices from a small number of firms, including Apple.

"When we launched this sector inquiry, we were concerned that there might be a risk of gatekeepers emerging in this sector," said Executive Vice-President Margrethe Vestager, in charge of competition policy, in a statement. "We were worried that they could use their power to harm competition, to the detriment of developing businesses and consumers."

"From the first results published today, it appears that many in the sector share our concerns," she continued. "And fair competition is needed to make the most of the great potential of the Internet of Things for consumers in their daily lives."

The preliminary report does not say that Apple, or others, are in breach of competition laws. It says that other companies have reported that Amazon, Google and "to a slightly lesser extent" Apple, have emerged as the main competitors in the field.

"A large number of respondents, across all consumer IoT segments, point out that the main obstacle to developing new products and services is the lack of ability to compete with Google, Amazon and Apple," says the full report.

"These players have become the leading technology companies," it continues, "and built their own ecosystems within and beyond the consumer IoT sector by combining their own, and integrating third-party, products and services into a branded consumer offering with a large number of users."

Following its initial consultation, the EU is concerned about fostering "interoperability among different brands," which it describes as "important as it allows users to build IoT ecosystems with heterogeneous products, enhancing consumer choice and preventing lock-in into a certain provider's products."

Having solicited responses from companies during the research for the preliminary report, the European Commission has now begun a public consultation. Interested parties have until September 1, 2021, to submit comments.

"This analysis will feed into our future enforcement and regulatory action," said Vesteger, "so we look forward to receiving further feedback from all interested stakeholders in the coming months."

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